UAE-based Majid Al Futtaim today announced its audited operational and financial results for 2020. The company reported revenue of AED32.6 billion and EBITDA of AED3.8 billion, representing declines of 7% and 19%, respectively, driven by the impact of the COVID-19 pandemic. The company’s assets decreased 6% to approximately AED59.1 billion.
“Despite the extraordinary events of 2020, Majid Al Futtaim’s full year performance demonstrated the resilience of our people and business model, diverse portfolio, operational agility, proactive investments and prudent financial risk management,” said Alain Bejjani , Chief Executive Officer of Majid Al Futtaim.
From the onset of the pandemic, Majid Al Futtaim adopted a stakeholder-first strategy, including strengthening its engagement with governments across all markets. In order to guarantee a sustainable supply of fresh fruit and vegetables across the country, it partnered with the Ministry of Climate Change and Environment (MOCCAE) in the UAE, to boost the availability of locally grown produce across Carrefour UAE stores, by opening new distribution channels for more than 6,000 small and medium-sized local farmers.
Amid government-mandated closures and lockdowns, Majid Al Futtaim decided to forego rent at its 27 shopping malls across five markets to ease the financial burden on its tenants, while stores were temporarily closed.
The company accelerated its digital transformation journey to respond to the rapid shift to online, while offering tenants and small businesses new and innovative platforms to reach their customers with the launch of Marketplace and Trends at Your Doorstep. Click & Collect and Mobile Scan & Go to merge its online and offline experience. Once restrictions started to ease, it launched the Food Central at City Centre Deira, to offer a wholly unique take on mall dining, in response to changing consumer habits.
Compared to 2019, Majid Al Futtaim – Properties registered a decline of 24% in revenue and 21% in EBITDA, standing at AED3.5 billion and AED2.3 billion, respectively.
The Shopping Malls business saw a decline in revenue due to temporary asset closures across the region, the proactive decision to forego tenant rent payments during closure periods and rent relief mechanisms to support tenants. During the second half of the year, the business experienced a gradual recovery in footfall as the economy started to reopen.
Majid Al Futtaim – Hotels experienced a 60% drop in occupancy rates due to asset closures for a prolonged period, and reduced demand as a result of border closures, travel restrictions and lower capacity.
The company’s financial and liquidity position remains strong, with cash and available committed facilities covering its net financing needs for at least the next three years. The company’s debt maturity profile is light over the next couple of years, with no material debt maturity until 2023, and net debt position reduced to AED12.4 billion through rigorous focus on cash flow across the business.
Despite challenging macroeconomic conditions, the company’s BBB credit rating and ‘stable outlook’ have been reaffirmed by Standard & Poor’s and Fitch Ratings. This reflects the company’s healthy liquidity position, resilience of its diversified business model, proactive approach to tackling the Covid-19 crisis and continued prudent financial management.
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